As President Barack Obama convened a high-level summit Monday pledging to set the country on a more responsible fiscal course, he blamed the government’s financial straits on his predecessor, President George W. Bush, and on gimmicks used to keep hundreds of billions of dollars in federal spending off the books.

“This administration has inherited a $1.3 trillion deficit — the largest in our nation’s history, and our investments to rescue the nation’s economy will add to that deficit,” Obama said as he convened a fiscal responsibility summit at the White House on Monday. “We cannot and will not sustain deficits like these without end. Contrary to the prevailing wisdom in Washington these past few years, we cannot simply spend as we please and defer the consequences to the next budget, the next administration or the next generation.”

Obama gave policy wonks pride of place in the East Room as he convened about 130 lawmakers, policy advocates and union and business leaders for a meeting to showcase his commitment to reining in the deficit and getting control of exploding federal entitlement programs.

“The long-term fiscal picture is unsustainable,” a liberal economist, Robert Greenstein of the Center on Budget and Policy Priorities, told the group. “We are on the path to the very debt explosion we must avoid. ... To address the daunting long-term fiscal problem, everything on both the spending and tax side ... will have to be on the table.”

While holding the summit so close to passage of the $787 billion stimulus package jarred some, others said bold steps were necessary.

“Crises of the magnitude of the current one only end with overwhelming government action,” an adviser to Sen. John McCain’s presidential bid, Mark Zandi of Moody’s Economy.com, told the gathering.

Obama’s budget director, Peter Orszag, sounded one of the administration’s key themes: that the president’s health care reform plan is essential to getting programs such as Medicare and Medicaid under control.

“To my fellow budget hawks in this room and in the rest of the country, let me be very clear: Health care reform is entitlement reform,” he said. “The path to fiscal responsibility must run directly through health care.”

Obama promised to cut the current budget deficit in half and avoid what he called the “casual dishonesty” of gimmicks that kept federal spending for wars and natural disasters off the budget.

“We do ourselves no favors by hiding the truth about what we spend. In order to address our fiscal crisis, we’re going to have to be candid about its scope,” he said.

In a measure of the spending challenge, Obama lauded the Agriculture Department for saving $19 million in training and management costs — a figure that amounts to a rounding error on the trillion-dollar deficit.

As for a program with potentially grander impact, White House press secretary Robert Gibbs declined to confirm reports that Obama dropped plans to set up a Social Security commission after congressional leaders objected. But at a briefing Monday, Gibbs promised there would be few celebrating when Obama’s budget is released on Thursday. “Everybody has to be involved in the sharing of pain,” he said.
After hearing from Obama in the East Room, summit participants headed to the nearby Eisenhower Executive Office Building to attend one of five “breakout sessions” that focused on narrow issues. Top administration officials were to shepherd the discussions, with Treasury Secretary Timothy Geithner leading one on taxes and White House economic adviser Lawrence Summers tackling Social Security.

In a last-minute reshuffle, CIA Director Leon Panetta, a former budget director and chief of staff under President Bill Clinton, was dropped as a leader of the budget discussion, and Pentagon official William Lynn slipped off the list of those tackling government procurement.

Obama agreed to convene the summit in December as he was trying to build support for his stimulus plan among conservative Democrats. In exchange for backing the stimulus, some Blue Dog Democrats wanted assurances Obama would commit to taming the deficit.